JAMB Principles of Accounts 1994 Question 40

Question 40

Company Accounts

A limited liability company has an authorized share capital of ₦50 million split into 100 million shares. 80 million shares were offered for subscription at 60k per share payable in full on application. These have been fully subscribed and issued.
What is the issued capital?

A.₦40m
B.₦48m
C.₦50m
D.₦80m.

Show the answer and explanation

Answer: A (₦40m)

Explanation

Issued share capital is shown at nominal value: 80 million × ₦0.50 = ₦40 million (the extra 10k a share is share premium).